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USS results hurt by economic climate

Keywords: Tags  U.S. Steel, John Surma, earnings results, flat-rolled, tubular, Catherine Ngai

NEW YORK — U.S. Steel Corp. posted a fourth-quarter net loss of $50 million, citing uncertainty in the global economic climate and high import levels.

"For the third consecutive quarter all three of our reportable segments (flat-rolled, tubular and U.S. Steel Europe) had positive operating results despite the uncertain global economic environment," U.S. Steel chairman and chief executive officer John P. Surma said in a statement Jan. 29. "Lower drilling and project line pipe activity, as well as continued high import levels, significantly reduced our tubular segment’s results. For our flat-rolled segment, our profitability was negatively affected by the uncertain domestic fiscal situation as well as continued high levels of flat-rolled steel imports."

While the results marked an improvement from the $211-million loss recorded in the same quarter a year earlier, it stood in sharp contrast to net income of $44 million in the third quarter of 2012.

Net sales for the three months ended Dec. 31 totaled nearly $4.49 billion, down 6.9 percent from $4.82 billion a year earlier and 3.5 percent below $4.65 billion in the third quarter.

Flat-rolled results also decreased in the fourth quarter due to lower average realized prices and shipments, compressed mill lead times and an uncertain domestic fiscal situation, the Pittsburgh-based steelmaker said. Lower raw material and repair and maintenance costs were partially offset by higher natural gas costs.

Flat-rolled product prices averaged $721 per ton in the fourth quarter, down 2.7 percent from $741 in the third quarter and a year earlier.

Demand continues to "exhibit caution early in the year," although recent increases in daily order entry rates suggest that spot market demand will progress, U.S. Steel said.

"We expect higher shipments in the first quarter than the fourth quarter, with increases across many of our industry segments. Average spot prices are expected to be higher than the fourth quarter as recently announced price increases take effect," Surma said.

Last week, U.S. Steel was among other steelmakers that hiked prices on carbon flat-rolled products by $40 to $50 per ton (, Jan. 23).

For the full year, U.S. Steel posted a net loss of $124 million, more than double the $53-million loss seen in 2011, on sales that slipped 2.8 percent to $19.33 billion.

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